Tax season is just around the corner, and if you owe back taxes, this time of year can feel especially stressful. As a tax debt lawyer TN has trusted for over 30 years, I know tax debt is an issue that affects more folks than you may realize.
Collectively, Americans owe billions in back taxes. According to recent data from 2020, outstanding tax debt in America hovered around $527 billion—roughly $381 billion in federal tax debt, reported by the IRS, and $146 billion in state tax debt. We have reason to believe that figure has only increased in the past year.
If you are dealing with tax debt, there’s no need to feel shame. The important thing is to find a way out from under it and towards financial freedom. Thankfully, bankruptcy can make that dream a reality.
Bankruptcy offers freedom from tax debt
Yes, extensions and payment plans are an option for those with tax debt. But interest and penalties can make thousands of dollars of debt that much harder to pay off. In addition, the IRS is extremely aggressive as far as collectors go. If you owe money, the IRS has the right to garnish your wages and place liens on your home. And that is not even the worst-case scenario. The punishments for back taxes can become drastic.
With bankruptcy, you can stop IRS harassment for good and ensure your wages and property are safe.
Chapter 7 Bankruptcy and Tax Debt
A Chapter 7 bankruptcy wipes out all of your dischargeable debt. This means it can help get rid of tax debt and get the IRS off your back, if you meet the following criteria:
- It must be simple income tax.
- The tax debt must be at least 3 years old.
- Your returns must have been filed on time.
If your tax debt isn’t three years old, you’re not out of options. I can still help you through a Chapter 13 consolidation plan.
Chapter 13 bankruptcy and tax debt
A Chapter 13 bankruptcy makes your tax debt more manageable. This type of bankruptcy will help you get out of debt over time, with affordable monthly payments spread out over 3-5 years. This means in about five years, you’ll be debt free.
There’s hope. Call a tax debt lawyer TN trusts today for FREE
If you’re overwhelmed by tax debt, even if you don’t think you qualify for bankruptcy, there is always hope. Our team of experienced and compassionate tax debt lawyers will look at your situation for FREE. Contact us online or give us a call at 901-327-2100 for a FREE consultation. We will do everything we can to help you find a way out of tax debt so you can start fresh.
I’ve helped hundreds of clients get on the path to a brighter financial future, and I can help you, too. It costs nothing to find out if bankruptcy is right for you. Don’t wait. Give us a call today.